Alignment Healthcare, Inc.ALHC
Alignment Healthcare, Inc. Leases Disclosure
Leases
Our leases are primarily for our corporate office, including parking spaces, and healthcare services operating facilities and expire at various intervals up through 2030. The majority of our leases contain renewal options, some of which include options to extend the lease for up to five years per option.
The majority of our leases are comprised of fixed payments. When certain portions of the lease payments are not fixed, we consider those payments to be variable in nature. These variable lease payments include, but are not limited to, common area maintenance, parking, taxes and insurance. These variable payments are not included in the ROU asset or lease liability and are recorded within selling, general and administrative expenses in the consolidated statement of operations and are recorded based upon actual costs in the period incurred.
Certain leases also contain rent escalation clauses that require additional rental amounts in the later years of the term. Rent expense for leases with rent escalation is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.
At December 31, 2025, $7,019 of operating ROU assets were recorded as right of use assets on the consolidated balance sheets. Lease liabilities of $1,958 and $6,467 were included in accounts payable and accrued expenses and long-term lease liabilities, respectively.
At December 31, 2024, $7,818 of operating ROU assets were recorded as right of use assets on the consolidated balance sheets. Lease liabilities of $1,212 and $7,835 were included in accounts payable and accrued expenses and long-term lease liabilities, respectively.
The following table summarizes total fixed operating lease costs and variable operating lease cost, excluding short-term lease and finance lease costs, for the years ended December 31, 2025, 2024, and 2023:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Fixed operating lease costs | $ | 2,661 | $ | 2,592 | $ | 2,817 | |||||||||||
| Variable operating lease costs | 234 | 404 | 431 | ||||||||||||||
| Total operating leases costs | $ | 2,895 | $ | 2,996 | $ | 3,248 | |||||||||||
Fixed and variable operating leases costs are included within selling, general and administrative expenses in the consolidated statement of operations. Short term and finance lease costs were immaterial. For the year-ended December 31, 2025, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities included within our operating cash flows was $1,504, $1,525 and $3,510, respectively.
Lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the lease commencement date.
The weighted average remaining lease term for operating leases is 3.9 years with a weighted average discount rate 11.6% at December 31, 2025.
The weighted average remaining lease term for operating leases is 4.40 years with a weighted average discount rate 12.0% at December 31, 2024
The weighted average remaining lease term for finance leases is 3.3 years with a weighted average discount rate 4.3% at December 31, 2025.
In the year ended December 31, 2025, $213 and $0 of operating lease and finance lease assets, respectively, were exchanged for lease liabilities related to newly commenced leases.
In the year ended December 31, 2024, $26 and $0 of operating lease and finance lease assets, respectively, were exchanged for lease liabilities related to newly commenced leases
The following table summarizes our lease assets and liabilities as of December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Lease assets | |||||||||||
| $ | 6,753 | $ | 7,818 | ||||||||
| 266 | — | ||||||||||
| Total lease assets | $ | 7,019 | $ | 7,818 | |||||||
| Lease liabilities | |||||||||||
| Current | |||||||||||
| 1,873 | 1,212 | ||||||||||
| 85 | — | ||||||||||
| Non-current | |||||||||||
| 6,282 | 7,835 | ||||||||||
| 185 | — | ||||||||||
| Total lease liabilities | $ | 8,425 | $ | 9,047 | |||||||
Maturities of lease liabilities under operating leases by fiscal year are as follows:
| As of December 31, 2025 | |||||
| 2026 | $ | 2,595 | |||
| 2027 | 2,445 | ||||
| 2028 | 2,200 | ||||
| 2029 | 2,243 | ||||
| 2030 and thereafter | 548 | ||||
| Total lease payments | $ | 10,031 | |||
| Less: Interest | 1,878 | ||||
| Present value of lease liabilities | $ | 8,153 | |||
Maturities of lease liabilities under finance leases by fiscal year are as follows:
| As of December 31, 2025 | |||||
| 2026 | $ | 95 | |||
| 2027 | 95 | ||||
| 2028 | 95 | ||||
| 2029 | 4 | ||||
| 2030 and thereafter | — | ||||
| Total lease payments | $ | 289 | |||
| Less: Interest | 17 | ||||
| Present value of lease liabilities | $ | 272 | |||
We sublease space not used in our operations. For the years ended December 31, 2025, 2024 and 2023, sublease income was $16, $206, and $565, respectively. For the year ended December 31, 2025, no ROU asset impairment was recorded. We recorded $143 ROU asset impairment for the year ended December 31, 2024, and there was no ROU asset impairment recorded for the year ended December 31, 2023.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.